Full Text of HB3474 100th General Assembly
HB3474 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 HB3474 Introduced , by Rep. Peter Breen SYNOPSIS AS INTRODUCED: |
| |
Amends the Unemployment Insurance Act. Provides that if a business is transferred to another individual or entity that, at the time of transfer, has any substantial common ownership, management, or control of the transferor and transferee, then the experience rating records of the transferred business shall be transferred to the transferee. Effective January 1, 2018.
|
| |
| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
|
| | | HB3474 | | LRB100 09368 JLS 19530 b |
|
| 1 | | AN ACT concerning employment.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Unemployment Insurance Act is amended by | 5 | | changing Section 1507.1 as follows: | 6 | | (820 ILCS 405/1507.1) | 7 | | Sec. 1507.1. Transfer of trade or business; contribution | 8 | | rate. Notwithstanding any other provision of this Act: | 9 | | A.(1) If an individual or entity transfers its trade or | 10 | | business, or a portion thereof, to another individual or entity | 11 | | and, at the time of the transfer, there is any substantial | 12 | | common ownership, management, or control of the transferor and | 13 | | transferee, then the experience rating records attributable to | 14 | | of the transferred trade or business transferor and transferee | 15 | | shall be transferred to the transferee combined for the purpose | 16 | | of determining their rates of contribution . For purposes of | 17 | | this subsection, a transfer of trade or business includes but | 18 | | is not limited to the transfer of some or all of the | 19 | | transferor's workforce. | 20 | | (1.5) if, following a transfer of experience rating records | 21 | | under paragraph (1), the Director determines that a substantial | 22 | | purpose of the transfer of the trade or business was to obtain | 23 | | a reduced liability for contributions, the experience rating |
| | | HB3474 | - 2 - | LRB100 09368 JLS 19530 b |
|
| 1 | | accounts of the employers involved shall be combined into a | 2 | | single account and a single rate shall be assigned to the | 3 | | account. | 4 | | (2) For the calendar year in which there occurs a transfer | 5 | | to which paragraph (1) or (1.5) applies: | 6 | | (a) If the transferor or transferee had a contribution | 7 | | rate applicable to it for the calendar year, it shall | 8 | | continue with that contribution rate for the remainder of | 9 | | the calendar year. | 10 | | (b) If the transferee had no contribution rate | 11 | | applicable to it for the calendar year, then the | 12 | | contribution rate of the transferee shall be computed for | 13 | | the calendar year based on the experience rating record of | 14 | | the transferor or, where there is more than one transferor, | 15 | | the combined experience rating records of the transferors, | 16 | | subject to the 5.4% rate ceiling
established pursuant to | 17 | | subsection G of Section 1506.1 and
subsection A of Section | 18 | | 1506.3. | 19 | | B. If any individual or entity that is not an employer | 20 | | under this Act at the time of the acquisition acquires the | 21 | | trade or business of an employing unit, the experience rating | 22 | | record of the acquired business shall not be transferred to the | 23 | | individual or entity if the Director finds that the individual | 24 | | or entity acquired the business solely or primarily for the | 25 | | purpose of obtaining a lower rate of contributions. Evidence | 26 | | that a business was acquired solely or primarily for the |
| | | HB3474 | - 3 - | LRB100 09368 JLS 19530 b |
|
| 1 | | purpose of obtaining a lower rate of contributions includes but | 2 | | is not necessarily limited to the following: the cost of | 3 | | acquiring the business is low in relation to the individual's | 4 | | or entity's overall operating costs subsequent to the | 5 | | acquisition; the individual or entity discontinued the | 6 | | business enterprise of the acquired business immediately or | 7 | | shortly after the acquisition; or the individual or entity | 8 | | hired a significant number of individuals for performance of | 9 | | duties unrelated to the business activity conducted prior to | 10 | | acquisition. | 11 | | C. An individual or entity to which subsection A applies | 12 | | shall pay contributions with respect to each calendar year at a | 13 | | rate consistent with that subsection, and an individual or | 14 | | entity to which subsection B applies shall pay contributions | 15 | | with respect to each calendar year at a rate consistent with | 16 | | that subsection. If an individual or entity knowingly violates | 17 | | or attempts to violate this subsection, the individual or | 18 | | entity shall be subject to the following penalties: | 19 | | (1) If the individual or entity is an employer, then,
| 20 | | in addition to the contribution rate that would otherwise | 21 | | be calculated (including any fund building rate provided | 22 | | for pursuant to Section 1506.3),
the employer shall be | 23 | | assigned a penalty contribution rate
equivalent to 50% of | 24 | | the contribution rate (including any fund building rate | 25 | | provided for pursuant to Section 1506.3), as calculated | 26 | | without regard to this subsection for the
calendar year |
| | | HB3474 | - 4 - | LRB100 09368 JLS 19530 b |
|
| 1 | | with respect to which the violation or
attempted violation | 2 | | occurred and the
immediately following calendar year. In | 3 | | the case of an employer whose contribution rate, as | 4 | | calculated without regard to this subsection or Section | 5 | | 1506.3, equals or exceeds the maximum rate established | 6 | | pursuant to paragraph 2 of subsection E of Section 1506.1, | 7 | | the penalty rate shall equal 50% of the sum of that maximum | 8 | | rate and the fund building rate provided for pursuant to | 9 | | Section 1506.3. In the case of an employer whose | 10 | | contribution rate is subject to the 5.4% rate ceiling | 11 | | established pursuant to subsection G of Section 1506.1 and | 12 | | subsection A of Section 1506.3, the penalty rate shall | 13 | | equal 2.7%. If any product obtained
pursuant to this | 14 | | subsection is not an exact multiple of
one-tenth of 1%, it | 15 | | shall be increased or reduced, as the
case may be, to the | 16 | | nearer multiple of one-tenth of 1%. If
such product is | 17 | | equally near to 2 multiples of one-tenth of
1%, it shall be | 18 | | increased to the higher multiple of
one-tenth of 1%. Any | 19 | | payment attributable to the penalty contribution rate | 20 | | shall be deposited into the clearing account. | 21 | | (2) If the individual or entity is not an employer, the | 22 | | individual or entity shall be subject to a penalty of | 23 | | $10,000 for each violation. Any penalty attributable to | 24 | | this paragraph (2) shall be deposited into the Special | 25 | | Administrative Account. | 26 | | D. An individual or entity shall not knowingly advise |
| | | HB3474 | - 5 - | LRB100 09368 JLS 19530 b |
|
| 1 | | another in a way that results in a violation of subsection C. | 2 | | An individual or entity that violates this subsection shall be | 3 | | subject to a penalty of $10,000 for each violation. Any such | 4 | | penalty shall be deposited into the Special Administrative | 5 | | Account. | 6 | | E. Any individual or entity that knowingly violates | 7 | | subsection C or D shall be guilty of a Class B misdemeanor. In | 8 | | the case of a corporation, the president, the secretary, and | 9 | | the treasurer, and any other officer exercising corresponding | 10 | | functions, shall each be subject to the aforesaid penalty for | 11 | | knowingly violating subsection C or D. | 12 | | F. The Director shall establish procedures to identify the | 13 | | transfer or acquisition of a trade or business for purposes of | 14 | | this Section. | 15 | | G. For purposes of this Section: | 16 | | "Experience rating record" shall consist of years | 17 | | during which liability for the payment of contributions was | 18 | | incurred, all benefit charges incurred, and all wages paid | 19 | | for insured work, including but not limited to years, | 20 | | benefit charges, and wages attributed to an individual or | 21 | | entity pursuant to Section 1507 or subsection A. | 22 | | "Knowingly" means having actual knowledge of or acting | 23 | | with deliberate ignorance of or reckless disregard for the | 24 | | statutory provision involved. | 25 | | "Transferee" means any individual or entity to which | 26 | | the transferor transfers its trade or business or any |
| | | HB3474 | - 6 - | LRB100 09368 JLS 19530 b |
|
| 1 | | portion thereof. | 2 | | "Transferor" means the individual or entity that | 3 | | transfers its trade or business or any portion thereof. | 4 | | H. This Section shall be interpreted and applied in such a | 5 | | manner as to meet the minimum requirements contained in any | 6 | | guidance or regulations issued by the United States Department | 7 | | of Labor. Insofar as it applies to the interpretation and | 8 | | application of the term "substantial", as used in subsection A, | 9 | | this subsection H is not intended to alter the meaning of | 10 | | "substantially", as used in Section 1507 and construed by | 11 | | precedential judicial opinion, or any comparable term as | 12 | | elsewhere used in this Act.
| 13 | | (Source: P.A. 94-301, eff. 1-1-06.)
| 14 | | Section 99. Effective date. This Act takes effect January | 15 | | 1, 2018.
|
|